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Agree. However, as you level up, the increase per hour should also increase (+.5 or +1 per hour). Also, there should be some items you can buy (or a more powerful version that a boss drops) that increases you hp and/or mp regeneration.

I think option 3, if your in a standard battle and willing to wait 24 hours or so to gain a small increase in gold or Xp then fine, but it means i could take on all of the Level to City bosses right now as i can take 1 hit without dying